In addition to keeping the federal government operating through February 8, 2018, the newly-enacted Continuing Appropriations Act provides temporary relief from three health-related taxes imposed by the Affordable Care Act (ACA) and funds the Children’s Health Insurance Program (CHIP) through fiscal year 2023. With regard to the ACA taxes, the Continuing Appropriations Act:
- Imposes a two-year moratorium on the ACA’s 2.3% excise tax on the sale of medical devices. The device tax will not apply to sales during calendar years 2018 and 2019.
- Delays for two years the excise tax on certain high-cost employer-sponsored health coverage (the so-called “Cadillac tax”). Under the law, the tax will be effective in 2022 rather than 2020.
- Provides a one-year moratorium on the annual excise tax imposed on health insurers, applicable to calendar year 2019.
Since the Continuing Appropriations Act only keeps the government open for less than three weeks, Congress will be facing another budget deadline in the near future. It is anticipated that there will be a push to use the next funding bill as an opportunity to address a number of expired Medicare payment and policy provisions (often called “extenders”), such as the extension of the outpatient therapy cap exceptions process.